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PrintThe UK’s Financial Times said that the deal was part of LSE Group’s move for a massive upgrade of its trading platform. MIT which has provided world class solutions to around 15 exchanges in the world will help LSE as well. Solutions to be provided by MIT is part of the deal,” analysts in Sri Lanka said. Whilst MIT’s ownership will change, jobs of MIT staff, numbering around 400, will remain intact. The deal involves a share-swap which means MIT management will in turn own some stakes in LSE.
The deal to provide LSE with its cores solutions will be MIT’s biggest breakthrough considering the global as well as regional profile of LSE. Analysts said that LSE taking over MIT will strengthen latter’s financial muscle as well as corporate profile to bid for other global exchanges.
Analysts said that MIT due to its smaller balance sheet size hadn’t been able to bid for some of the bigger deals and it coming under the LSE umbrella will give more than desired global strength. The deal with LSE is also part of MIT’s strategy of adjusting to dynamics of its global market whilst it has managed to remain profitable midst volatile conditions.
Among MIT solutions run exchanges include the American Exchange, the Indian Commodities Exchange as well as Sri Lanka’s tiny yet world class Colombo Stock Exchange.
Millennium IT has developed, in laboratory conditions at a facility in UK, what it claims is the fastest trading system in the world. It handles trades in 130 microseconds, compared with 250 microseconds on Nasdaq OMX, which had claimed to be the fastest based on commercial application. The Sri Lankan company won its first contract integrating systems for the Colombo Stock Exchange.
The FT report also said that he move marks the biggest step yet taken by Xavier Rolet, chief executive, to dismantle the legacy of his predecessor Clara Furse. The exchange’s existing TradElect trading system was upgraded two years ago at a cost of £40m ($66m), the paper said.
The purchase of Millennium IT, founded by Sri Lankan entrepreneur Tony Weeresinghe in 1996, is likely to cost under £50 million. The LSE has £370 million in loan facilities at its disposal, the FT report added.
Mr Rolet told the FT this month that lack of capacity was holding the LSE back. “We have to [upgrade] because the technology specifications are no longer competitive and that’s impacting our ability to support volume growth,” he said.
Local analysts told The Bottom Line that the acquisition of MIT by LSE will also significantly enhance Sri Lanka’s profile among global investors. “This could be described as one of the major breakthroughs for Sri Lanka,” they added.
The deal also may be a good omen for President Mahinda Rajapaksa declared Year of IT and English in 2009.
“If marketed properly, Sri Lanka as a country can use the LSE buy of MIT to leverage globally and draw more big names,” analysts added.
MillenniumIT is a premier technology solutions provider serving the global capital markets industry. The Company's products currently powers exchanges, depositories, brokerages and regulatory bodies in the United States, Europe, Africa and the Asia-Pacific region.
MillenniumIT supplies, implements and supports a suite of capital market products that include trading platforms, Smart Order Routers (SOR), surveillance, clearing and CSD Products. These products cater to trading multiple asset classes including equities, derivatives, debt, commodities, forex, structured products and exchange-traded funds.
MillenniumIT is also an industry-leading enterprise and telecom solutions provider. In the telecom sector, the Company's focus on Next Generation Networks has come about through a close partnership with Cisco Systems. In partnership with Sun Microsystems and Oracle, MillenniumIT designs and builds open, standards-based IT infrastructure for large and medium enterprises in the country. The Company is also a leading Security Solutions provider. This work is carried out by MillenniumESP which is an independent division of MillenniumIT.
Millennium Information Technologies was founded in 1996 following a management buyout of the Open Systems Division of ComputerLand Sri Lanka, a Sun Microsystems authorized reseller. Starting out as a systems integrator in Sri Lanka, MillenniumIT soon moved into the field of application software design and development, which is now the company's main source of revenue.
The catalyst for this change was a systems integration contract from the Colombo Stock Exchange (CSE), which was reinterpreted as an opportunity to design and install a straight-through processing system for the Exchange. The CSE solution became the basis for MillenniumIT's suite of capital markets software products that followed.
Subsequently, business wins in Mauritius and Malaysia were the first steps towards a worldwide customer base. Today, MillenniumIT is a multi-million-dollar company with offices and facilities in Sri Lanka, Boston, New Jersey, London and Mumbai.